Macarthur Coal declares force majeure due to rain

Macarthur Coal
has declared force majeure at its Bowen Basin mines in Queensland because of heavy rain affecting production.

Macarthur Coal said it was assessing the effect of the unseasonal heavy rain on previous guidance made on October 27 when it provided a first half fiscal 2011 profit guidance of between $115 million and $125 million.

At that time Macarthur Coal reported that the effect of above-average rainfall was being managed through the use of existing run-of-mine stockpiles as required.

Sustained rain in recent weeks has resulted in the depletion of these stockpiles and affected coal recovery from both the Coppabella and Moorvale mines.

The Issac Plains coalmine, a 50-50 joint venture between Aquila Resources and Vale has also declared force majeure.

Chief executive
Nicole Hollows
said coalmining and production has been hampered by heavy rainfall in recent weeks but Macarthur Coal was not unduly affected during the first quarter.

“Bowen Basin coalminers have been impacted by unseasonal weather since the beginning of the financial year," Ms Hollows said in a statement on Friday.

“Macarthur Coal was not unduly affected in the first quarter of FY 2011 and was managing any impacts on production by accessing run-of-mine stockpiles when required.

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“However, coalmining and production has been hampered by heavy rainfall in recent weeks and Macarthur Coal is now declaring force majeure to its customers under existing contracts."

The company’s previous guidance was based on production estimates of between 2.5 million tonnes and 2.7 million tonnes for the period.

Production for the five months to November 30 was 2.31 million tonnes.

Ms Hollows said that while it was not possible to predict the impact of continued unseasonal weather in the next half-year, once conditions improved the company had coal ready to be processed and transported.